On Monday, April Nymex natural gas closed down $0.204, or 6.59%, marking a three-week low. The decline is attributed to forecasts of warmer US weather, which are expected to reduce heating demand, according to the Commodity Weather Group.
The recent drop in prices follows a 10% fall in WTI crude oil. In addition, Qatar reported that 17% of the world’s largest natural gas export plant at Ras Laffan Industrial City was damaged, impacting 20% of global liquefied natural gas supply, which may eventually increase US nat-gas exports. Current US dry gas production stands at 112.4 billion cubic feet per day (bcf/day), a 4.3% increase year-on-year, while gas demand is recorded at 81.5 bcf/day, a 7.4% annual rise.
Baker Hughes reported that the number of active US nat-gas drilling rigs has decreased by 2 to 131 as of March 20, although it remains near a 2.5-year high. In Europe, as of March 17, gas storage was 29% full, below the five-year seasonal average of 41%.
